Brean Capital Sees Good Hearthstone Outlook for Activision Blizzard

In a report published Tuesday, Brean Capital analyst Todd Mitchell reiterated a Buy rating and $23.00 price target on Activision Blizzard ATVI. In the report, Brean Capital noted, “Yesterday, we hosted a call with Joost van Dreunen, CEO and co-founder, of SuperData Research, which collects information on digital video games from around the world. Based on this discussion, we feel further confidence in our expectations for Activision's Hearthstone, a recently released, free-to-play, digital card game which we believe could generate over $100 million in 2014. According to van Dreunen, the global market for digital game content, including mobile and free-to-play, has grown to nearly $1 billion a month, with digital card games alone generating in excess of $1 billion per year. However, competition in the sector has increased, placing a premium on developers that can develop a standout title based on a well-known brand and support it with strong marketing. Hearthstone, a slickly produced title based on the Worlds of Warcraft lore supported by Activision's impressive marketing team, checks all of these boxes. With Hearthstone's success, we expect Activision to continue to go after this growing market segment with other free-to-play titles.” Activision Blizzard closed on Monday at $19.33.